S3940

An Act authorizing the withholding of funds due to the federal government and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

“Department” means the Department of the Treasury.

“Federal government” means the United States of America, and any office, department, board, commission, bureau, division, corporation, agency, or instrumentality thereof.

“State agency” means any of the principal departments in the Executive Branch of State government, and any division, board, bureau, office, commission, or other instrumentality within or created by such department, the Legislature of the State and any office, board, bureau, or commission created by the Legislative Branch, the Judicial Branch of the State Government, and any independent State authority, commission, instrumentality or agency.

“State Treasurer” means the Treasurer of the State of New Jersey. b. Not more than 15 days following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), and on the first day of each month thereafter, the chief executive officer of every State agency shall submit a report to the State Treasurer, in such form and manner as determined by the State Treasurer, setting forth:

(1) any federal funds owed to the State agency by the federal government and for which the nonpayment of those funds by the federal government is in contravention of a decision or order issued by a court of competent jurisdiction; and

(2) any funds the State agency anticipates will be due and owing by the State agency to the federal government in the 12 months next following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), including, but not limited to:

(a) employer taxes owed to the federal government by the State;

(b) federal employment taxes withheld by the State on behalf of the federal government;

(d) backup withholding of federal taxes; and

(e) federal grant repayments.

c. Not more than 30 days following the deadline for the submission of each report required pursuant to subsection b. of this section, the State Treasurer shall prepare and submit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report containing all of the information submitted by each State agency, including any such information applicable to the department. All State agencies shall cooperate with the department and make available to the department such information and assistance necessary to effectuate the purposes of P.L. , c. (pending before the Legislature as this bill).

d. Following the submittal of any report required pursuant to subsection c. of this section that indicates any federal funds are owed to the State in contravention of a decision or order issued by a court of competent jurisdiction, the Governor may direct the State Treasurer, in consultation with the Director of the Division of Budget and Accounting in the Department of the Treasury, to withhold payments to the federal government. The total amount withheld shall not exceed the amount of federal funds owed to the State in contravention of a decision or order issued by a court of competent jurisdiction, specified in the report submitted by the State Treasurer pursuant to subsection c. of this section.

e. Any moneys appropriated for payments to the federal government that are withheld pursuant to subsection d. of this section shall be held in reserve and lapse to the General Fund upon the conclusion of the State fiscal year in which the monies are appropriated, provided, however, that the total amount of reserved and lapsed moneys shall not exceed amount of federal funds owed to the State in contravention of a decision or order issued by a court of competent jurisdiction, as described in the report submitted by the State Treasurer pursuant to subsection c. of this section.

2. This act shall take effect immediately.

STATEMENT

This bill authorizes the State to withhold State payments to the federal government when the federal government is found by a court of competent jurisdiction to be in noncompliance with an order or decision requiring the federal government to make payments to the State.

The bill requires all State agencies, including agencies in the legislative and judicial branches of State government, to submit a report to the State Treasurer, not more than 15 days following enactment of bill, and on the first day of each month thereafter, setting forth: (1) any federal funds owed to the State by the federal government and for which the nonpayment of those funds by the federal government is in contravention of a decision or order issued by a court of competent jurisdiction; and (2) any funds the State agency anticipates will be due and owing by the State agency to the federal government in the 12 months following enactment of the bill.

The bill requires the State Treasurer to submit, to the Governor and the Legislature, a report containing all of the information submitted by State agencies not more than 30 days following the deadline for submittal of the report by State agencies. The bill directs the State Treasurer to provide updated information to the Governor and the Legislature on a monthly basis.

Following submittal of the report, the Governor may direct the State Treasurer, in consultation with the Director of the Division of Budget and Accounting, now also known as the Office of Management and Budget, to withhold payments to the federal government. The total amount withheld shall not exceed the amount of federal funds owed to the State in contravention of a decision or order issued by a court of competent jurisdiction. The bill requires any moneys withheld from the federal government to be held in reserve and lapse to the General Fund upon the conclusion of the State fiscal year in which the moneys are appropriated. The total amount cannot exceed the total amount of funding owed to the State by the federal government.